Happy Bear Squeeze Monday Guys! Looks likely that the multiday losing streak (9 days) that hasn't been seen in 36 years will come to an end today as the futures are ready to open up over 25 points this morning. Looking at this 60 minute chart we see the futures have hit the falling trendline this morning and has backed down from it a few points. Consider how overbought we are short term that fall trendline might hold the bulls back at least during the first half of today if not all day. While I don't expect some big down move from here I also don't see much more on the upside today. Most likely we'll stay up here in this range all day and try to push through this mornings' current high later today near the close. This is my preferred scenario.
My 2nd scenario is that we push through the resistance early in the day and make a run for the higher falling trendline (in brownish red) coming in around 2123 today. The last scenario would be a pullback to half the gap up, which I think has the lowest odds. I see the highest odds are the "sideways most of the day and some attempt to rally late in the day" scenario I mentioned first. Then the "push through the resistance early" as the next likely plan. Overall I see this gap up holding this zone and/or pushing higher. I don't see an gap fill today and "at best" I could see the gap window tested (around 2102.50). The markets are still worried about the election on Tuesday so while I think we'll hold this level today I don't think this is over with yet on the downside.
This is likely just a bear squeeze that will end in days to weeks with a peak high still lower then the all time high. We have a possible FP on the SPY that could be the upside target? However, that doesn't mean it will turn back down once it's hit... it only means that the market will likely go up and hit that level. After that it might chop around, rollover, or trade sideways for awhile and push up more? Don't know? Of course the election tomorrow is a wildcard as we just don't know what will happen after it's over. So for now let's just stick will today and expect either sideways trading with some odds of a pullback to gap window, or a push through on up higher with the next resistance at 2123.
